David Walker on the Colbert ReportBy James Hamilton

Hope you saw the GAO's David Walker on "The Colbert Report" last night. David did a super job outlining the "tsunami" rolling toward America... despite Colbert's asides and verbal jabs. But that's what Colbert does.

Walker is a great spokesman for the effort. Way to go, sir!

Ad NauseumBy James Hamilton

We hear again from the Social Security and Medicare Trustees that the state of these two programs is perilous and that immediate action will lessen the need for drastic action in the future. Yawn.

We Amerians - as a whole - have never been motivated by anything less than crisis. We can hear warnings until the prophets are blue in the face (or until they're silent altogether), but we won't act until the situation is imminent. How many times have you read these words in this space?

There is a whole industry devoted to assuring the American people that nothing is wrong with Social Security that a good tax increase won't solve. Add to this the unwillingness of politicians - Republicans and Democrats alike - even to talk honestly about the issue and we've got a situation ripe for crisis. Earnest attempts by elected officials and others to raise the issue are shouted down. "There is no crisis!"

Electricity blackouts, hunger, pre-empting "American Idol" with a speech by the president... these are the things that get our attention because their effects are immediate. Even the sufferings of hurricane victims or the plight of our men and women in Iraq and elsewhere (or of the Iraqis themselves) fail to rise very far on our radar screens if we're not immediately or intimately affected.

So, one more time America, the coming fiscal crisis is real. Act now or quit your bellyachin'.

Social Security Trustees: The "Do Nothing" Emperor Has No Clothes - Guest Blog by Dr. Jeff BrownBy For Our Grandchildren

On Monday the Social Security Trustees released their annual Trustee’s Report on the status of the U.S. Social Security system.  The news confirms what all responsible policy analysts already know – that Social Security is on an unsustainable fiscal course and is in need of reform.  In other words, we are now one step closer to watching the “predictable surprise” of large deficits unfold.

Next year, in 2008, the first of the baby boomers will begin turning 62 and collecting benefits from Social Security. As a result of this demographic tidal wave, Social Security’s annual costs will begin rising dramatically.  In just 10 years, by the time today’s 2nd graders are graduating high school, the annual costs of the program will exceed the cash it is bringing in.

For those in the “Do Nothing” camp who claim that through some combination of faster than expected economic growth or other good fortune we can avert the need for change, the Trustees provide some sobering data.  Specifically, they show that there is a 95% chance that the program will begin cash deficits sometime between 2013 and 2022.  In other words, the deficits are coming, and no amount of wishful thinking is going to make the problem go away. Once the deficits begin, they will not relent.  Unless action is taken soon to rein in the costs of the program, the Trustees estimate that by 2035, the cost of paying full promised benefits will exceed 17% of a workers earnings (versus the current payroll tax of 12.4%).

Once again, the report confirms that taking action soon is preferable to waiting. As the Trustees themselves write, “The longer we wait to address these challenges, the more limited will be the options available, the greater will be the required adjustments, and the more severe the potential detrimental economic impact on our nation."

In short, the Trustees’ Report shows once again that the “Do Nothing” Emperor really does have no clothes.

Americans and TaxesBy James Hamilton

As I stood in line at the post office yesterday to mail my tax return, I noticed most of the people around me - like lambs to the slaughter - were pretty darn cheerful as they waited to send a large portion of their incomes to keep the government operating. Go figure.

What's maddening is that millions go through this routine each year without giving a moment's thought to whether Congress uses our tax dollars wisely or not. That's why the little tidbit in yesterday's paper from Heritage Foundation's Brian Riedl on where our tax dollars go was entertaining and informative.

Check it out. Then go lie down, take a couple of aspirin, and wait for the pain to go away.

Samuelson Writes About Boomers' "Economic Crimes"By Heidi Neel

In today’s Washington Post, Robert Samuelson reviews the new Christopher Buckley book, “Boomsday,” a satirical look at our nation’s entitlement problem.  Protagonist Cassandra Devine, is a 29-year-old blogger who is incensed by the self-serving lifestyle of Baby Boomers. In her view, Boomers do little more than drain Social Security and pass on debt. So Cassandra urges her generation to march on retirement communities.

Samuelson compares “Boomsday” to the writing of Jonathan Swift, “who once suggested that the Irish relieve a famine by eating their young;” in other words using the absurd to discuss moral outrages.

But sometimes fact is stranger then fiction, and in fact a growing number of experts, such as Larry Kotlikoff, predict a time of warfare between the young and the old.  They see the day when younger workers will refuse to pay higher and higher payroll taxes to provide the growing number of elderly with a secure retirement when those young people know there will not be enough workers to pay for their retirement. 

While he doesn’t prophesize generational warfare, Comptroller General of the United States, David Walker isn’t handing out gold stars to Boomers for stewardship.

Walker told CBS news program “60 Minutes” that “we have promised almost unlimited health care to senior citizens who never see the bills, and the government already is borrowing money to pay them.”

Walker says, “each of us as public officials…have a responsibility not just to deliver positive results today, not just to leave our organizations, our states, our localities, and our country better off when we leave than when we came. We have a responsibility to leave it better positioned for the future. The Baby Boom generation may be the first in the history of this country to break that long-standing tradition.”

Understanding the gravity of our entitlement situation, Samuelson humbly writes, “I was born in late 1945 and count myself a part of this failure. In our careless self-absorption, we are committing a political and economic crime against our children and perhaps -- when they awaken to their victimization -- even ourselves.”

Boomsday DoomsdayBy James Hamilton

Chris Buckley's new novel, Boomsday, is getting lots of attention these days. And why shouldn't it? In typical Buckley style, he satirizes a catastrophic problem hurtling toward every American: the future of entitlement spending.

While Buckley's solution to the coming crisis is, um, unorthodox, his attempt to raise the issue above the complacency of elected officials and most Americans is commendable. I wish him well!

Listen to David WalkerBy Tim Penny

From my recent interview with U.S. Comptroller General David Walker, I'm pleased to report that the Concord Coalition's Fiscal Wake-Up Tour has been very successful. People across the country are getting the truth and beginning to act on it. It's just too bad we don't have a budget process in Washington that forces Congress to do the same.

The government pays experts like Walker, Federal Reserve Chairman Ben Bernanke, and others to do the research and publish this information.

Accordingly, Members of Congress should know this stuff.  Why is it that Walker has to go on the road to discuss the coming fiscal crisis when it's really members of Congress who should be holding a wake up tour for their constituents?